Canada reject Bitcoin as legal tender

January 19
11:18 PM 2014

The Canadian government has finally said its piece about the Bitcoin debate, ending a long spell of silence of about the virtual currency, The Wall Street Journal blog Canada Real Time reported. On Thursday, January 16, a government official said Canada does not look at the Bitcoin as legal tender, casting doubts on the rising use of the digital money in the country.

In an emailed statement to the media outlet, an official from the Finance Department of Canada said, "Only Canadian bank notes and coins are recognized as legal tender in Canada. Bitcoin digital 'currency' is not legal tender in Canada."  The official, however, did not specify what the government's plans are concerning the licensing of money exchanges that convert Bitcoins to real currency, the report said.

The official also said that the Canadian government and watchdogs like the central bank and the Office of the Superintendent of Financial Institutions will still be tracking the developments related to digital currencies.

Meanwhile, Bank of Canada Spokesman Alexandre Deslongchamps was quoted in the report as saying that matters related to financial stability will prompt the bank to have more interest in Bitcoins and other alternative modes of payment.

Deslongchamps said, "Smaller, stand-alone payment systems for which there are many substitutes - like bitcoin - should generally require much less intensive oversight and regulation because they pose much less risk to the Canadian financial system as a whole. Nevertheless, these payment systems should be designed and operated to meet the needs of Canadians which would include convenience and ease of use, price, reliability, safety, and effective redress mechanisms."

Meanwhile, other countries have also warned about the cryptocurrency. Last month, the Bank of France said that it did not recognize Bitcoin to be legal tender. It also cautioned that holders of the currency faced a clear financial risk, the report said.

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